##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 1-32439
 CUISINE SOLUTIONS, INC.
  DELAWARE
    
    52-0948383(State of other jurisdiction of incorporation or organization)
    
    (IRS Employer Identification Number)
 85 S Bragg Street, Suite 600, Alexandria, VA 22312
 (703) 270-2900
  Yes þ No o
  o o þ
  Yes o No þ
   Class of Common Stock
    
    Number of SharesClass A
    
    16,537,541Class B
    
    None




---



##### 



TABLE OF CONTENTS
 PagePART IItem 1.
    
    Financial Statements (unaudited)
    
    
    3Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    26Item 4.
    
    Controls and Procedures
    
    
    26PART IIItem 1.
    
    Legal Proceedings
    
    
    27Item 1A.
    
    Risk Factors
    
    
    27Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 3.
    
    Defaults Upon Senior Securities
    
    
    27Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    27Item 5.
    
    Other Information
    
    
    27Item 6.
    
    Exhibits
    
    
    27SIGNATURES
    
    
    
    
    28EX-31.1:
    
    Certification of Chief Executive Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002EX-31.2:
    
    Certification of Chief Financial Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002EX-32.1:
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of The
Sarbanes-Oxley Act of 2002
 2




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##### 



CUISINE SOLUTIONS, INC.
 PART I: FINANCIAL INFORMATION
 Item 1. Financial Statements (unaudited)
 CUISINE SOLUTIONS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
 March 31,
    
    
    June 24,2007
    
    
    2006ASSETSCurrent assetsCash and cash equivalents
    
    $
    1,276,000
    
    
    $
    2,154,000Trade accounts receivable, net
    
    
    9,329,000
    
    
    
    5,360,000Inventory, net
    
    
    12,838,000
    
    
    
    9,461,000Prepaid expenses
    
    
    1,194,000
    
    
    
    373,000Accounts receivable, related parties
    
    
    39,000
    
    
    
    25,000Deferred tax assets
    
    
    1,246,000
    
    
    
    Other current assets
    
    
    807,000
    
    
    
    616,000Assets from discontinued operations
    
    
    4,000
    
    
    
    6,000TOTAL CURRENT ASSETS
    
    
    26,733,000
    
    
    
    17,995,000Investments, non-current
    
    
    375,000
    
    
    
    375,000Fixed assets, net
    
    
    10,922,000
    
    
    
    8,321,000Restricted cash
    
    
    55,000
    
    
    
    5,000Deferred tax assets, net
    
    
    6,654,000
    
    
    
    Other assets
    
    
    85,000
    
    
    
    70,000TOTAL ASSETS
    
    $
    44,824,000
    
    
    $
    26,766,000LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesLine-of-credit
    
    $
    3,000,000
    
    
    $
    1,000,000Current portion of long-term debt
    
    
    467,000
    
    
    
    356,000Accounts payable and accrued expenses
    
    
    9,697,000
    
    
    
    5,831,000Accrued payroll and related liabilities
    
    
    2,330,000
    
    
    
    2,455,000Liabilities from discontinued operations
    
    
    25,000
    
    
    
    150,000Total current liabilities
    
    
    15,519,000
    
    
    
    9,792,000Long-term debt, less current portion
    
    
    4,183,000
    
    
    
    3,321,000Asset retirement obligation
    
    
    499,000
    
    
    
    398,000TOTAL LIABILITIES
    
    
    20,201,000
    
    
    
    13,511,000Commitments and contingenciesStockholders equityCommon StockClass A Stock  $.01 par value, 20,000,000 shares authorized,
16,537,541 and 16,439,191 shares issued and
outstanding at March 31, 2007 and June 24, 2006
    
    
    166,000
    
    
    
    165,000Class B Stock  $.01 par value, 175,000 shares authorized, none issued
    
    
    
    
    
    
    Additional paid-in capital
    
    
    27,828,000
    
    
    
    27,516,000Accumulated deficit
    
    
    (4,360,000
    )
    
    
    (15,127,000
    )Accumulated Other Comprehensive Income:Cumulative translation adjustment
    
    
    989,000
    
    
    
    701,000TOTAL STOCKHOLDERS EQUITY
    
    
    24,623,000
    
    
    
    13,255,000TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    44,824,000
    
    
    $
    26,766,000
  3




---



##### 



CUISINE SOLUTIONS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
 Sixteen Weeks Ended
    
    
    Forty Weeks EndedMarch 31,
    
    
    April 1,
    
    
    March 31,
    
    
    April 1,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    23,898,000
    
    
    $
    17,967,000
    
    
    $
    61,352,000
    
    
    $
    49,314,000Cost of goods sold
    
    
    18,852,000
    
    
    
    13,498,000
    
    
    
    47,354,000
    
    
    
    36,578,000Gross margin
    
    
    5,046,000
    
    
    
    4,469,000
    
    
    
    13,998,000
    
    
    
    12,736,000Selling and administration
    
    
    4,350,000
    
    
    
    3,678,000
    
    
    
    10,904,000
    
    
    
    9,489,000Depreciation and amortization
    
    
    69,000
    
    
    
    43,000
    
    
    
    186,000
    
    
    
    122,000Other operating income
    
    
    (1,000
    )
    
    
    (13,000
    )
    
    
    (5,000
    )
    
    
    (30,000
    )Income from operations
    
    
    628,000
    
    
    
    761,000
    
    
    
    2,913,000
    
    
    
    3,155,000Non-operating income (expense)Investment income
    
    
    1,000
    
    
    
    8,000
    
    
    
    7,000
    
    
    
    48,000Interest expense
    
    
    (29,000
    )
    
    
    (36,000
    )
    
    
    (175,000
    )
    
    
    (107,000
    )Other income (expense), net
    
    
    9,000
    
    
    
    (68,000
    )
    
    
    28,000
    
    
    
    (114,000
    )Total non-operating expense
    
    
    (19,000
    )
    
    
    (96,000
    )
    
    
    (140,000
    )
    
    
    (173,000
    )Income before income tax
    
    
    609,000
    
    
    
    665,000
    
    
    
    2,773,000
    
    
    
    2,982,000Provision for income tax benefit (expense)
    
    
    7,889,000
    
    
    
    (6,000
    )
    
    
    7,878,000
    
    
    
    (14,000
    )Income from continuing operations before
discontinued operations
    
    
    8,498,000
    
    
    
    659,000
    
    
    
    10,651,000
    
    
    
    2,968,000Discontinued operationsNet gain from dissolution of CS Norway
    
    
    116,000
    
    
    
    
    
    
    
    116,000
    
    
    
    Net gain from discontinued operations
    
    
    116,000
    
    
    
    
    
    
    
    116,000
    
    
    
    NET INCOME
    
    $
    8,614,000
    
    
    $
    659,000
    
    
    $
    10,767,000
    
    
    $
    2,968,000Per common share dataBasic earnings:From continuing operations
    
    $
    0.52
    
    
    $
    0.04
    
    
    $
    0.65
    
    
    $
    0.18From discontinued operations
    
    
    0.00
    
    
    
    0.00
    
    
    
    0.00
    
    
    
    0.00$
    0.52
    
    
    $
    0.04
    
    
    $
    0.65
    
    
    $
    0.18Diluted earnings:From continuing operations
    
    $
    0.46
    
    
    $
    0.04
    
    
    $
    0.58
    
    
    $
    0.16From discontinued operations
    
    
    0.01
    
    
    
    0.00
    
    
    
    0.01
    
    
    
    0.00$
    0.47
    
    
    $
    0.04
    
    
    $
    0.59
    
    
    $
    0.16Weighted average shares outstanding-basic
    
    
    16,471,879
    
    
    
    16,299,374
    
    
    
    16,452,149
    
    
    
    16,197,434Common stock equivalents
    
    
    1,960,536
    
    
    
    1,977,554
    
    
    
    1,913,645
    
    
    
    1,936,973Weighted average shares outstanding-diluted
    
    
    18,432,415
    
    
    
    18,276,928
    
    
    
    18,365,794
    
    
    
    18,134,407
  4




---



##### 



CUISINE SOLUTIONS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
(Unaudited)
 UnrealizedRetained
    
    
    Gains/(Losses)Additional
    
    
    Earnings
    
    
    on Debt
    
    
    Cumulative
    
    
    TotalCommon
    
    
    Paid-In
    
    
    (Accumulated
    
    
    and Equity
    
    
    Translation
    
    
    StockholdersStock
    
    
    Capital
    
    
    Deficit)
    
    
    Investments
    
    
    Adjustment
    
    
    EquityBalance, June 24, 2006
    
    $
    165,000
    
    
    $
    27,516,000
    
    
    $
    (15,127,000
    )
    
    $
    
    
    
    $
    701,000
    
    
    $
    13,255,000Exercise of common stock options
    
    
    1,000
    
    
    
    125,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    126,000Stock-based compensation
    
    
    
    
    
    
    187,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    187,000Forty weeks 2007 net income
    
    
    
    
    
    
    
    
    
    
    10,767,000
    
    
    
    
    
    
    
    
    
    
    
    10,767,000Other Comprehensive IncomeUnrealized loss on debt
and equity investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    288,000
    
    
    
    288,000Other Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    288,000Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,055,000Balance, March 31, 2007
    
    $
    166,000
    
    
    $
    27,828,000
    
    
    $
    (4,360,000
    )
    
    $
    
    
    
    $
    989,000
    
    
    $
    24,623,000
 UnrealizedRetained
    
    
    Gains/(Losses)Additional
    
    
    Earnings
    
    
    on Debt
    
    
    Cumulative
    
    
    TotalCommon
    
    
    Paid-In
    
    
    (Accumulated
    
    
    and Equity
    
    
    Translation
    
    
    StockholdersStock
    
    
    Capital
    
    
    Deficit)
    
    
    Investments
    
    
    Adjustment
    
    
    EquityBalance, June 25, 2005
    
    $
    161,000
    
    
    $
    26,754,000
    
    
    $
    (18,781,000
    )
    
    $
    (7,000
    )
    
    $
    524,000
    
    
    $
    8,651,000Exercise of common stock options
    
    
    3,000
    
    
    
    383,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    386,000Stock-based compensation
    
    
    
    
    
    
    265,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    265,000Forty weeks 2006 net income
    
    
    
    
    
    
    
    
    
    
    2,968,000
    
    
    
    
    
    
    
    
    
    
    
    2,968,000Other Comprehensive IncomeUnrealized loss on debt
and equity investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,000
    )
    
    
    
    
    
    
    (19,000
    )Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,000
    
    
    
    23,000Other Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,000Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,972,000Balance, April 1, 2006
    
    $
    164,000
    
    
    $
    27,402,000
    
    
    $
    (15,813,000
    )
    
    $
    (26,000
    )
    
    $
    547,000
    
    
    $
    12,274,000
  5




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##### 



CUISINE SOLUTIONS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
 Year to dateForty weeks endedMarch 31,
    
    
    April 1,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    10,767,000
    
    
    $
    2,968,000Adjustments to reconcile net income to net cash (used in) provided by operating activitiesDepreciation and amortization
    
    
    1,017,000
    
    
    
    652,000Change in allowance for doubtful accounts
    
    
    (215,000
    )
    
    
    137,000Inventory obsolescence reserve
    
    
    132,000
    
    
    
    118,000Loss on investments
    
    
    
    
    
    
    5,000Stock-based compensation
    
    
    187,000
    
    
    
    265,000Valuation allowance reversal
    
    
    (7,900,000
    )
    
    
    Changes in assets and liabilities, net of effects of non-cash transactions:Increase in trade accounts receivable
    
    
    (3,754,000
    )
    
    
    (1,744,000
    )Increase in inventory
    
    
    (3,509,000
    )
    
    
    (2,212,000
    )Increase in prepaid expenses
    
    
    (821,000
    )
    
    
    (283,000
    )(Increase) decrease in accounts receivable, related parties
    
    
    (14,000
    )
    
    
    67,000(Increase) decrease in other assets
    
    
    (206,000
    )
    
    
    58,000Increase in accounts payable and accrued expenses
    
    
    3,855,000
    
    
    
    810,000(Decrease) increase in accrued payroll and related liabilities
    
    
    (125,000
    )
    
    
    452,000Increase in other current liabilities
    
    
    11,000
    
    
    
    70,000Changes in assets and liabilities from discontinued operations
    
    
    (123,000
    )
    
    
    9,000Net cash (used in) provided by operating activities
    
    
    (698,000
    )
    
    
    1,372,000CASH FLOWS FROM INVESTING ACTIVITIESProceeds from investments
    
    
    
    
    
    
    456,000Increase in restricted cash
    
    
    (50,000
    )
    
    
    Capital expenditures
    
    
    (3,486,000
    )
    
    
    (2,193,000
    )Net cash used in investing activities
    
    
    (3,536,000
    )
    
    
    (1,737,000
    )CASH FLOWS FROM FINANCING ACTIVITIESPayments on debt
    
    
    (231,000
    )
    
    
    (871,000
    )Proceeds from debt
    
    
    1,173,000
    
    
    
    962,000Net borrowing (repayment) on line-of-credit
    
    
    2,000,000
    
    
    
    (774,000
    )Payments on debts from discontinued operations
    
    
    
    
    
    
    (1,031,000
    )Proceeds from stock issuance
    
    
    126,000
    
    
    
    386,000Net cash provided by (used in) financing activities
    
    
    3,068,000
    
    
    
    (1,328,000
    )Net decrease in cash and cash equivalents
    
    
    (1,166,000
    )
    
    
    (1,693,000
    )Change in cumulative translation adjustment
    
    
    288,000
    
    
    
    23,000Cash and cash equivalents, beginning of period
    
    
    2,154,000
    
    
    
    2,171,000CASH and CASH EQUIVALENTS, END OF PERIOD
    
    $
    1,276,000
    
    
    $
    501,000SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATIONCash paid during the period for interest
    
    $
    237,000
    
    
    $
    148,000Cash paid during the period for income taxes
    
    $
    27,000
    
    
    $
    20,000Addition to fixed assets due to recognition of asset retirement obligation
    
    $
    101,000
    
    
    $
    Addition to fixed assets through lease
    
    $
    31,000
    
    
    $
    
  6




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##### 



Cuisine Solutions, Inc.
   NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     Nature of Operations
  Principles of Consolidation
   7




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##### 



Revenue Recognition
 Revenue
Recognition When Right of Return Exists
 Customer Dependency
  Impairment of Long-Lived Assets and Long-Lived Assets To Be Disposed Of
 Accounting
for the Impairment or Disposal of Long-Lived Assets
 Foreign Currency Translation
  NOTE 2  FISCAL PERIODS
  NOTE 3  ACCOUNTS RECEIVABLE
  March 31, 2007
    
    
    June 24, 2006Trade accounts receivable
    
    $
    9,776,000
    
    
    $
    6,022,000Allowance for doubtful accounts
    
    
    (447,000
    )
    
    
    (662,000
    )Trade accounts receivable, net
    
    $
    9,329,000
    
    
    $
    5,360,000
 8




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##### 



NOTE 4  INVENTORY
 Inventory Costs-An Amendment of ARB No.43, Chapter 4
   March 31, 2007
    
    
    June 24, 2006Raw materials
    
    $
    3,805,000
    
    
    $
    3,371,000Frozen product & other finished goods
    
    
    8,422,000
    
    
    
    5,297,000Packing materials & supplies
    
    
    1,024,000
    
    
    
    1,074,00013,251,000
    
    
    
    9,742,000Less obsolescence reserve
    
    
    (413,000
    )
    
    
    (281,000
    )$
    12,838,000
    
    
    $
    9,461,000
 NOTE 5  COMMITMENTS AND CONTINGENCIES
   NOTE 6  TRANSACTIONS WITH RELATED PARTIES
  9




---



##### 



NOTE 7  DISCONTINUED OPERATIONS
   March 31, 2007
    
    
    June 24, 2006Assets of discontinued operations:Cash
    
    $
    4,000
    
    
    $
    Other assets
    
    
    
    
    
    
    6,000Total assets of discontinued operations
    
    $
    4,000
    
    
    $
    6,000Liabilities of discontinued operations:Accounts payable and accrued liabilities
    
    $
    25,000
    
    
    $
    150,000Total liabilities of discontinued operations
    
    $
    25,000
    
    
    $
    150,000
 NOTE 8  EARNINGS PER SHARE
  NOTE 9  ACCOUNTING FOR STOCK-BASED COMPENSATION
  10




---



##### 



Sixteen weeks
    
    Sixteen weeks
    
    Forty weeks
    
    Forty weeksended
    
    ended
    
    ended
    
    endedMarch 31, 2007
    
    April 1, 2006
    
    March 31, 2007
    
    April 1, 2006Expected dividend
yield
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Risk-free interest
rate
    
    
    5.0
    %
    
    
    5.0
    %
    
    
    5.0
    %
    
    
    5.0
    %Expected life (in
years)
    
    
    5
    
    
    
    5
    
    
    
    5
    
    
    
    5Expected volatility
    
    
    95
    %
    
    
    136
    %
    
    
    95
    %
    
    
    136
    %
   Sixteen weeks ended
    
    
    Sixteen weeks endedMarch 31, 2007
    
    
    April 1, 2006Weighted-
    
    
    
    
    
    
    Weighted-Average Exercise
    
    
    
    
    
    
    Average ExerciseOptions
    
    Shares
    
    
    Price
    
    
    Shares
    
    
    PriceOutstanding at beginning of the period
    
    
    2,260,500
    
    
    $
    0.96
    
    
    
    2,677,176
    
    
    $
    1.02Granted
    
    
    
    
    
    $
    
    
    
    
    7,276
    
    
    $
    0.01Exercised
    
    
    98,350
    
    
    $
    1.28
    
    
    
    (210,103
    )
    
    $
    1.30Forfeited or expired
    
    
    (66,200
    )
    
    $
    0.96
    
    
    
    
    
    
    $
    Outstanding at end of the period
    
    
    2,292,650
    
    
    $
    0.95
    
    
    
    2,474,349
    
    
    $
    0.99Exercisable at end of the period
    
    
    2,275,150
    
    
    $
    0.95
    
    
    
    2,194,461
    
    
    $
    0.99
  Forty weeks ended
    
    
    Forty weeks endedMarch 31, 2007
    
    
    April 1, 2006Weighted-
    
    
    
    
    
    
    Weighted-Average Exercise
    
    
    
    
    
    
    Average ExerciseOptions
    
    Shares
    
    
    Price
    
    
    Shares
    
    
    PriceOutstanding at beginning of the period
    
    
    2,448,099
    
    
    $
    0.99
    
    
    
    2,795,968
    
    
    $
    1.02Granted
    
    
    12,401
    
    
    $
    0.01
    
    
    
    18,034
    
    
    $
    0.01Exercised
    
    
    98,350
    
    
    $
    1.28
    
    
    
    (339,653
    )
    
    $
    1.14Forfeited or expired
    
    
    (266,200
    )
    
    $
    1.28
    
    
    
    
    
    
    $
    Outstanding at end of the period
    
    
    2,292,650
    
    
    $
    0.95
    
    
    
    2,474,349
    
    
    $
    0.99Exercisable at end of the period
    
    
    2,275,150
    
    
    $
    0.95
    
    
    
    2,194,461
    
    
    $
    0.99
 11




---



##### 



Stock Options OutstandingNumber
    
    
    Weighted-Average
    
    
    
    
    
    
    AggregateOutstanding
    
    
    Remaining
    
    
    Weighted-Avg
    
    
    IntrinsicRange of Exercise Prices
    
    3/31/2007
    
    
    Contractual Life
    
    
    Exercise Price
    
    
    Value$0.01 to $0.24
    
    
    173,903
    
    
    
    7.38
    
    
    $
    0.01$0.25 to $0.6561
    
    
    85,250
    
    
    
    5.57
    
    
    $
    0.25$0.6562 to $1.030
    
    
    1,224,000
    
    
    
    5.84
    
    
    $
    0.89$1.031 to $1.37
    
    
    607,747
    
    
    
    3.19
    
    
    $
    1.14$1.38 to $1.50
    
    
    81,750
    
    
    
    2.41
    
    
    $
    1.39$1.51 to $2.50
    
    
    120,000
    
    
    
    7.58
    
    
    $
    2.102,292,650
    
    
    
    5.21
    
    
    $
    0.95
    
    
    $
    14,422,856
 Stock Options ExercisableNumber
    
    
    Weighted-Average
    
    
    
    
    
    
    AggregateExercisable
    
    
    Remaining
    
    
    Weighted-Avg
    
    
    IntrinsicRange of Exercise Prices
    
    at 3/31/2007
    
    
    Contractual Life
    
    
    Exercise Price
    
    
    Value$0.01 to $0.24
    
    
    173,903
    
    
    
    
    
    
    $
    0.01$0.25 to $0.6561
    
    
    85,250
    
    
    
    
    
    
    $
    0.25
    
    
    
    $0.6562 to $1.030
    
    
    1,224,000
    
    
    
    
    
    
    $
    0.88$1.031 to $1.37
    
    
    595,247
    
    
    
    
    
    
    $
    1.14$1.38 to $1.50
    
    
    81,750
    
    
    
    
    
    
    $
    1.39$1.51 to $2.50
    
    
    115,000
    
    
    
    
    
    
    $
    2.102,275,150
    
    
    
    5.20
    
    
    $
    0.95
    
    
    $
    14,320,406
 Share-Based Payment
  NOTE 10  INCOME TAXES
  12




---



##### 



Period EndedMarch 31, 2007
    
    
    June 24, 2006Current Deferred tax assetsInventory adjustment
    
    $
    121,000
    
    
    $
    121,000Allowance for bad debts
    
    
    102,000
    
    
    
    210,000NOL  US
    
    
    945,000
    
    
    
    NOL  France
    
    
    78,000
    
    
    
    Sub-total current deferred tax asset
    
    
    1,246,000
    
    
    
    331,000Long Term Deferred tax assets:NOL  US
    
    $
    5,155,000
    
    
    $
    5,992,000NOL  Norway
    
    
    
    
    
    
    1,356,000NOL  France
    
    
    737,000
    
    
    
    415,000Capital losses
    
    
    63,000
    
    
    
    63,000Foreign other
    
    
    74,000
    
    
    
    74,000Basis difference in investments
    
    
    
    
    
    
    793,000Property and equipment
    
    
    249,000
    
    
    
    249,000Stock options
    
    
    241,000
    
    
    
    241,000Other
    
    
    135,000
    
    
    
    191,000Sub-total long term deferred tax assets
    
    
    6,654,000
    
    
    
    9,705,000Less: Deferred tax liabilitiesWorthless stock  Norway
    
    
    
    
    
    
    408,000Net deferred tax assets
    
    
    7,900,000
    
    
    
    9,297,000Less: Valuation allowance
    
    
    
    
    
    
    9,297,000Net deferred tax
    
    $
    7,900,000
    
    
    $
    
  NOTE 11  RECENT ACCOUNTING PRONOUNCEMENTS
 The Fair
Value Option for Financial Assets and Financial Liabilities
 Employers Accounting for Defined Benefit Pension
and Other Postretirement Plansan Amendment of FASB Statements No. 87, 88, 106 and 132(R)
 13




---



##### 



Fair Value Measurements
 Considering the
Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements
 Accounting for Uncertainty in Income
Taxes, an interpretation or FASB Statement No. 109
 14




---



##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
  The following analysis of our financial condition and results of operations should be read in
conjunction with our unaudited financial statements and the notes thereto contained elsewhere in
this report.
 BUSINESS OVERVIEW
   
    
    On Board Services: Airlines, railroad and cruise lines;
    
    Food Service: Hotel banquets, convention centers, sport stadiums and other special events such as the Olympics;
    
    Retail: Supermarket in-store deli, premium packaged foods;
    
    Military: Naval carriers, Army field feeding, and military dining halls and clubs; and
    
    National Restaurant Chains: Upscale multi-unit restaurants.
 CRITICAL ACCOUNTING ESTIMATES AND POLICIES
    15




---



##### 



Accounting for Income Taxes
  RECENT ACCOUNTING PRONOUNCEMENTS
 The Fair
Value Option for Financial Assets and Financial Liabilities
 Employers Accounting for Defined Benefit Pension
and Other Postretirement Plansan Amendment of FASB Statements No. 87, 88, 106 and 132(R)
 Fair Value Measurements
 Considering the
Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements
 Accounting for Uncertainty in Income
Taxes
 16




---



##### 



RESULTS OF OPERATIONS
 Comparison of the sixteen weeks ended March 31, 2007 to the sixteen weeks ended April 1, 2006
   Net Sales
  Q3 Fiscal 2007
    
    
    Q3 Fiscal 2006
    
    
    $ Change
    
    
    %ChangeU.S.
    
    $
    16,865,000
    
    
    $
    12,612,000
    
    
    $
    4,253,000
    
    
    
    33.7
    %France
    
    
    7,033,000
    
    
    
    5,355,000
    
    
    
    1,678,000
    
    
    
    31.3
    %Total Net Sales
    
    $
    23,898,000
    
    
    $
    17,967,000
    
    
    $
    5,931,000
    
    
    
    33.0
    %
    Q3 Fiscal 2007
    
    
    Q3 Fiscal 2006
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    4,103,000
    
    
    $
    3,290,000
    
    
    $
    813,000
    
    
    
    24.7
    %On Board Services
    
    
    5,318,000
    
    
    
    5,000,000
    
    
    
    318,000
    
    
    
    6.4
    %Retail
    
    
    7,073,000
    
    
    
    5,190,000
    
    
    
    1,883,000
    
    
    
    36.3
    %Military
    
    
    5,086,000
    
    
    
    3,443,000
    
    
    
    1,643,000
    
    
    
    47.7
    %National Restaurant Chains
    
    
    2,318,000
    
    
    
    1,044,000
    
    
    
    1,274,000
    
    
    
    122.0
    %Total
    
    $
    23,898,000
    
    
    $
    17,967,000
    
    
    $
    5,931,000
    
    
    
    33.0
    %
  17




---



##### 



U.S. Sales
  Q3 Fiscal 2007
    
    
    Q3 Fiscal 2006
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    2,273,000
    
    
    $
    2,023,000
    
    
    $
    250,000
    
    
    
    12.4
    %On Board Services
    
    
    2,824,000
    
    
    
    2,694,000
    
    
    
    130,000
    
    
    
    4.8
    %Retail
    
    
    4,390,000
    
    
    
    3,423,000
    
    
    
    967,000
    
    
    
    28.3
    %Military
    
    
    5,086,000
    
    
    
    3,443,000
    
    
    
    1,643,000
    
    
    
    47.7
    %National Restaurant Chains
    
    
    2,292,000
    
    
    
    1,029,000
    
    
    
    1,263,000
    
    
    
    122.7
    %Total
    
    $
    16,865,000
    
    
    $
    12,612,000
    
    
    $
    4,253,000
    
    
    
    33.7
    %
       France Sales
  Q3 Fiscal 2007
    
    Q3 Fiscal 2006
    
    $ Change
    
    %ChangeSales in U.S. dollars
    
    $
    7,033,000
    
    
    $
    5,355,000
    
    
    $
    1,678,000
    
    
    
    31.3
    %Sales in Euros
    
    
    5,387,000
    
    
    
    4,465,000
    
    
    
    922,000
    
    
    
    20.6
    %Average exchange rate
    
    
    0.7660
    
    
    
    0.8338
   Q3 Fiscal 2007
    
    
    Q3 Fiscal 2006
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    1,830,000
    
    
    $
    1,267,000
    
    
    $
    563,000
    
    
    
    44.4
    %On Board Services
    
    
    2,494,000
    
    
    
    2,306,000
    
    
    
    188,000
    
    
    
    8.2
    %Retail
    
    
    2,709,000
    
    
    
    1,782,000
    
    
    
    927,000
    
    
    
    52.0
    %Total
    
    $
    7,033,000
    
    
    $
    5,355,000
    
    
    $
    1,678,000
    
    
    
    31.3
    %
  18




---



##### 



Gross Margin
  Sixteen weeks endedMarch 31, 2007
    
    April 1, 2006
    
    % Change(Dollars in thousands)Net sales
    
    $
    23,898
    
    
    $
    17,967
    
    
    
    33.0
    %Gross margin
    
    $
    5,046
    
    
    $
    4,469
    
    
    
    12.9
    %Gross margin percentage
    
    
    21.1
    %
    
    
    24.9
    %
    Selling and Administrative Expenses
  Q3 Fiscal 2007
    
    
    Q3 Fiscal 2006
    
    
    $ Change
    
    
    %ChangeU.S.
    
    $
    3,400,000
    
    
    $
    2,914,000
    
    
    $
    486,000
    
    
    
    16.7
    %France
    
    
    950,000
    
    
    
    764,000
    
    
    
    186,000
    
    
    
    24.3
    %Total Selling and Administrative Expenses
    
    $
    4,350,000
    
    
    $
    3,678,000
    
    
    $
    672,000
    
    
    
    18.3
    %
  19




---



##### 



Depreciation and Amortization
  Non-operating Income and Expense
  Provision for Taxes
   Comparison of the forty weeks ended March 31, 2007 to the forty weeks ended April 1, 2006
   Net Sales
  YTD Fiscal 2007
    
    
    YTD Fiscal 2006
    
    
    $ Change
    
    
    %ChangeU.S.
    
    $
    43,475,000
    
    
    $
    34,770,000
    
    
    $
    8,705,000
    
    
    
    25.0
    %France
    
    
    17,877,000
    
    
    
    14,544,000
    
    
    
    3,333,000
    
    
    
    22.9
    %Total Net Sales
    
    $
    61,352,000
    
    
    $
    49,314,000
    
    
    $
    12,038,000
    
    
    
    24.4
    %
   20




---



##### 



YTD Fiscal 2007
    
    
    YTD Fiscal 2006
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    10,196,000
    
    
    $
    9,719,000
    
    
    $
    477,000
    
    
    
    4.9
    %On Board Services
    
    
    14,081,000
    
    
    
    12,750,000
    
    
    
    1,331,000
    
    
    
    10.4
    %Retail
    
    
    19,593,000
    
    
    
    12,672,000
    
    
    
    6,921,000
    
    
    
    54.6
    %Military
    
    
    13,585,000
    
    
    
    11,808,000
    
    
    
    1,777,000
    
    
    
    15.0
    %National Restaurant Chains
    
    
    3,897,000
    
    
    
    2,365,000
    
    
    
    1,532,000
    
    
    
    64.8
    %Total
    
    $
    61,352,000
    
    
    $
    49,314,000
    
    
    $
    12,038,000
    
    
    
    24.4
    %
  U.S. Sales
  YTD Fiscal 2007
    
    
    YTD Fiscal 2006
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    5,942,000
    
    
    $
    6,201,000
    
    
    $
    (259,000
    )
    
    
    (4.2
    %)On Board Services
    
    
    7,227,000
    
    
    
    6,238,000
    
    
    
    989,000
    
    
    
    15.9
    %Retail
    
    
    12,824,000
    
    
    
    8,158,000
    
    
    
    4,666,000
    
    
    
    57.2
    %Military
    
    
    13,585,000
    
    
    
    11,808,000
    
    
    
    1,777,000
    
    
    
    15.0
    %National Restaurant Chains
    
    
    3,897,000
    
    
    
    2,365,000
    
    
    
    1,532,000
    
    
    
    64.8
    %Total
    
    $
    43,475,000
    
    
    $
    34,770,000
    
    
    $
    8,705,000
    
    
    
    25.0
    %
       21




---



##### 



France Sales
  YTD Fiscal 2007
    
    YTD Fiscal 2006
    
    $ Change
    
    %ChangeSales in U.S. dollars
    
    $
    17,877,000
    
    
    $
    14,544,000
    
    
    $
    3,333,000
    
    
    
    22.9
    %Sales in Euros
    
    
    13,884,000
    
    
    
    12,082,000
    
    
    
    1,802,000
    
    
    
    14.9
    %Average exchange rate
    
    
    0.7766
    
    
    
    0.8307
   YTD Fiscal 2007
    
    
    YTD Fiscal 2006
    
    
    $ Change
    
    
    %ChangeFood Service
    
    $
    4,254,000
    
    
    $
    3,518,000
    
    
    $
    736,000
    
    
    
    20.9
    %On Board Services
    
    
    6,854,000
    
    
    
    6,512,000
    
    
    
    342,000
    
    
    
    5.3
    %Retail
    
    
    6,769,000
    
    
    
    4,514,000
    
    
    
    2,255,000
    
    
    
    50.0
    %Total
    
    $
    17,877,000
    
    
    $
    14,544,000
    
    
    $
    3,333,000
    
    
    
    22.9
    %
    Gross Margin
  Forty weeks endedMarch 31, 2007
    
    April 1, 2006
    
    % Change(Dollars in thousands)Net sales
    
    $
    61,352
    
    
    $
    49,314
    
    
    
    24.4
    %Gross margin
    
    $
    13,998
    
    
    $
    12,736
    
    
    
    9.9
    %Gross margin percentage
    
    
    22.8
    %
    
    
    25.8
    %
    22




---



##### 



Selling and Administrative Expenses
  YTD Fiscal 2007
    
    
    YTD Fiscal 2006
    
    
    $ Change
    
    
    %ChangeU.S.
    
    $
    8,425,000
    
    
    $
    7,193,000
    
    
    $
    1,232,000
    
    
    
    17.1
    %France
    
    
    2,479,000
    
    
    
    2,296,000
    
    
    
    183,000
    
    
    
    8.0
    %Total Selling and Administrative Expenses
    
    $
    10,904,000
    
    
    $
    9,489,000
    
    
    $
    1,415,000
    
    
    
    14.9
    %
  Depreciation and Amortization
  Non-operating Income and Expense
  Provision for Taxes
   Liquidity and Capital Resources
   23




---



##### 



FUTURE PROSPECTS
  Food Service
  On Board Services
  Retail
  24




---



##### 



Military
  National Restaurant Chains
  25




---



##### 



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Exposure
  Foreign Currency Risk
  Item 4. Controls and Procedures
    26




---



##### 



CUISINE SOLUTIONS, INC.
 PART II: OTHER INFORMATION
 Item 1. Legal Proceedings.
  Item 1A. Risk Factors.
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Item 3. Defaults Upon Senior Securities
  Item 4. Submission of Matters to a Vote of Security Holders
  Item 5. Other Information
  Item 6. Exhibits
 EXHIBIT INDEX
 ExhibitNumber
    
    Description3.1
    
    Restated Certificate of Incorporation, as amended. (1)3.2
    
    Certificate of Amendment of Restated Certificate of Incorporation. (2)3.3
    
    By-laws. (3)31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 (1)
    
    Incorporated by reference to exhibit 3-A of the Registrants Form 10-K/A for the year
ended June 27, 1992, filed with the SEC on April 2, 1993.(2)
    
    Incorporated by reference to exhibit 3.2 of the Registrants Registration Statement
on Form 8-A, filed with the SEC on February 22, 2005.(3)
    
    Incorporated by reference to exhibit 3-B of the Registrants Form 10-K/A for the year
ended June 27, 1992, filed with the SEC on April 2, 1993. 27




---



##### 



SIGNATURES
  CUISINE SOLUTIONS, INC.Date:May 14, 2007
    By:
    /s/ Stanislas VilgrainStanislas VilgrainChief Executive Officer and President By:
    /s/ Ronald ZilkowskiRonald ZilkowskiChief Financial Officer, Treasurer and
Corporate Secretary (Principal Financial Officer
and Principal Accounting Officer) 28